OMTEX CLASSES: Single entry question with answer

Mr. Suryakant maintains books on Single Entry and who given you the following Information:

Additional Information:-

(1) Mr. Suryakant introduced further capital of Rs. 20,000 on 1^st July,2006 and

had withdrawn Rs. 10,000 during the year.

(2) Interest on capital is allowed at 10% p.a.

(3) Additions to furniture and machinery were made on 1^st October,2006.

(4) Write off depreciation on furniture and machinery at 10% p.a.

(5) Create reserve for doubtful debts at 5% on Sundry debtors.

Prepare :- (a) Statement of Affairs and (b) Statement of Profit and Loss for the year ended 31^st March, 2007. (10)

In the books of Suryakant

Opening Statement of Affairs as on 1-4-2006

Liabilities	Rs.	Assets	Rs.
Capital	90,000	Cash in hand Cash at Bank Stock	500 2,500 20,000
Sundry Creditors	10,000	Sundry Debtors	25,000
Outstanding Expenses	3,000	Investments	20,000
		Furniture	10,000
		Machinery	25,000
	1,03,000		1,03,000

Closing Statement of Affairs as on 31-3-2007

Liabilities	Rs.	Rs.	Assets	Rs.	Rs.
Capital		143000	Cash in hand Cash at Bank Stock		2,000 5,000 30,000
			Sundry Debtors	40,000
			(-) New R.D.D.	2,000	38,000
Sundry Creditors		10,000	Investments		20,000
Outstanding Expenses		2,000	Furniture	25,000
			(-) Depreciation	1,750	23,250
			Machinery	40,000
			(-) Depreciation	3,250	36,750
		1,55,000			1,55,000

Statement of Profit & Loss for the year ended 31-3-2007

Particulars	Rs.	Rs.
Closing Capital balance Add: Drawings		1,43,000 10,000
Less: (1) Further capital introduced (2) Interest on capital	20,000 10,500	1,53,000 30,500
Less: Opening Capital Balance		1,22,500 90,000
Net Profit		32,500

Working Note: To find out depreciation on machinery

40,000

Old New

(12 months) 25,000 15,000 (6 months)

10% Depreciation = 2,500 + 750 = 3,250